Big brewery may reopen 'Side B' brew house

A Memphis brewer is considering reopening a long-closed portion of its brewing capacity.

Blues City Brewery has just completed an audit that shows it would cost just under $3 million to resurrect "Side B'' of its brew house, said George Parke. He is chairman and chief executive of City Brewing, which owns and operates breweries in La Crosse, Wisconsin, and Latrobe, Pennsylvania, as well as the 1.3-million-square-foot Memphis facility at 5151 E. Raines Road.

"This brewery was built with a Side A and a Side B,'' Parke said during one of the visits he makes from Wisconsin every month to six weeks.

"Currently, Side A is operational. Side B has not been operated in many years. A lot of parts have been sort of taken from it to keep Side A running,'' he said.

The company just completed an audit to determine how much money it must spend to revive Side B. "It's 3 million to resurrect it, plus there's some ancillary things'' like filters and tanks.

Beer-making had stopped at the facility when the former Schlitz, Stroh's and Coors brewery closed in 2007.  Chism-Hardy Enterprises made nonalcoholic beverages a few years, but brewing returned when Chism-Hardy sold the property to City  Brewing in 2011.

Now Blues City Brewery has about 15 to 20 customers "with more in the works,'' Parke said. It makes teas and energy drinks as well as beer and fermented malt beverages. Blues City is a co-packer, meaning it makes no branded beverage of its own but produces products for other companies.

The brewery employed 277 people on Dec. 31. More would be employed there, but the company is having a difficult time finding and keeping skilled workers, Parke said. Instead, Blues City is paying a lot of overtime to the workers it does have.

Memphis brewery loses big production contract to Anheuser-Busch InBev

"So we work a lot of 12-hour shifts,'' Parke said. As a result, workers are averaging annual income of about $55,000 instead of the expected $41,000, he said.

The facility is operating two of six lines. "If we did resurrect Side B of the brew house and could brew twice as much as we currently are, we could easily employ well in excess of 500 with no overtime,'' Parke said.

The Memphis operation is making a profit, but the company is plowing much of the money back into maintenance and upgrades. "It's a very expensive place to maintain,'' Parke said.

Blues City Brewery expects investment to hit $62M by 2017

The company is spending $5 million for a new roof. It's investing $3 million into new machinery that can mix a variety of beers in one package. It just installed a $1 million system that balances the pH for its wastewater. It spent $3 million on a new boiler. And it's considering the nearly $3 million project to reopen Side B of the brew house.

The investments are not solely a response to existing demand, but is a strategy to add capacity to attract more customers.

"We're committed to make this work,'' Parke said. "The ownership group is very focused on making Memphis a flagship facility.''